Building a world-class recognition and reward program

The power of recognition (stats and challenges)

The research on the power of recognition is wide-ranging. Our research has found that when people are recognized, 78% say are more likely to stay at the organization. We found that 68% of people feel consistent frequent recognition is the same or better than a 10% pay raise, and we know that 69% of employees said that recognition is helpful to their wellbeing.

There is no question that recognition is powerful, but it can feel like a challenge to implement a recognition program that will truly make a difference to employees and the company. Some of the top challenges we hear that prevent a culture of recognition include making it consistent between group and over time, getting buy-in from senior leaders and managers, and having the time and resources necessary to build a good program. Use the following best practices to avoid some of those common challenges.

Provide both recognition and appreciation to support employee needs

Another statistic that we love is from the HAAS School of Business and they found that when people feel recognized they are 23% more productive, however when those same employees feel appreciated, they are 43% more effective and perform better. Both of those impacts are impressive, but why the difference? We often use “recognize” and “appreciate” as synonyms and use them interchangeably in a sentence. This is one of the first principles we should consider when building a culture of recognition that genuinely drives performance.

Appreciation and recognition aren't the same thing, and both will be important in your program.

Recognition is when we show gratitude for what employees do. Appreciation is when we show gratitude for who employees are. For example, if you thank an employee who has responded quickly to solve a problem, you are recognizing them for their performance. When you invite an employee to join a panel because you know they will be a great asset to the discussion, you are appreciating who they are and the skills they bring to the table.

Six attributes of a successful recognition program

In addition to including elements of recognition and appreciation, you can analyze an existing recognition program, or better build a future recognition program, by considering these six program attributes:

1. Immediate - Are employees being recognized as close to the action as possible?
2. Visible - When employees are recognized or appreciated, is that visible to those they work with and those in other departments?
3. Consistent - Is the cadence of recognition relatively consistent over time and between groups?
4. Measurable - Can you track usage over time and between groups to spot trends and learn from them?
5. Multi-directional - Do all employees have access to and use your recognition tools?
6. Meaningful - Is the recognition linked to the impact those actions have on company mission, values, goals and other employees?

While there is value in person-to-person recognition story-telling – and it can feel easier to share feedback immediately in-person – some of these attributes are better supported by online, formal recognition programs, like measurement or visibility. Our most successful clients balance recognition in the moment with formalized recognition strategies.

Creating a program with layers

Here is an example of a Recognition and Reward Pyramid – this is an easy to follow, easy to remember framework for building a sustainable recognition program.

The reason we build these models in the shape of a pyramid is to indicate that the layers towards the bottom are more frequent, while the layers heading up the pyramid decrease in frequency but increase in impact. Our clients can decide on the number of layers that works best for them. Less layers will feel simpler and is a great starting place, and ramping up to a program with four or five layers will increase the variation and ability to personalize recognition for employees.

Peer-to-peer recognition and appreciation.

This is the type of recognition that most frequently happens in person. Our clients like to add an online eCard component to their programs – values-based and greeting cards – to allow for frequent shout outs within and across teams. This is where the majority of recognition will probably come from. It can be non-monetary, fun, consistent and multi-directional.

Calendar Milestones

This layer of the pyramid supports appreciating birthdays and anniversaries. Our 2024 report, Recognition's role in wellbeing, revealed that over 25% of employees say their managers don't recognize personal milestones. This is another instance where recognition and appreciation meet in the middle – no, Ed’s birthday doesn’t affect his sales stats, but acknowledging it affects his motivation and morale – and those affect his productivity.

You can get creative and include a monetary component, or have them automatically sent to employees to ensure no important dates get missed. In our Employee Engagement platform, managers receive alerts when one of these dates is approaching for someone on their team so they can add in their personal message and celebration.

Nominations

Time-based or topical Nominations (e.g. Employee of the Month, or Safety nominations) give all employees the chance to ‘nominate’ a peer for higher impact recognition. While the peer-to-peer eCards can ensure frequent recognition, nominations can include higher impact or more meaningful recognition into your program.

Rewards

Employee rewards have taken an increased role in recognition among our clients in the past few years. While most of our clients that use this level focus their reward budget on managers, it is possible to give everyone in your organization access to a budget. Enabling leaders and employees with the ability to provide powerful, tangible reinforcement when they see above-and-beyond behaviors can really take your program to the next level. As with all recognition, we encourage reward moments to focus on what the person did – so here leaders include the story in with the reward so that reward is clearly tied to an action.

Game Changers

Finally, the top tier is where the least ‘amount’ of recognition is shared, but typically features the rewards of the highest value and those that ‘get people talking.’ These should be values-based and have a communications plan behind them so they make a big splash!

Make it easy for managers

As with so many aspects of company success and culture, a lot of the success of a recognition culture resides with managers.

Their role is important. In our recent report The Appreciation Index, we found the number one driver of whether employees feel appreciated is whether they are recognized by managers. In our work, there are a two key, interrelated objections managers struggle with most. When these can be overcome, you create a recognition program that is more credible and more powerful.

“I’m just too busy...”

This is a common complaint from all across companies. “I have too much to do.” While we can do our best to highlight the value that recognition can provide to employees and back to leaders themselves, this fight is made easier if we take this complaint seriously.

Ensure your recognition program is easy to find and use and integrate your various HR technologies to prevent needless passwords and barriers. We have a recognition feed that we pull into MS Teams so employees see recognition despite a busy day and are reminded to place their own recognition. Finally, make sure peer-to-peer recognition is available and encouraged so that your program can flourish even when managers are swamped.

“It isn’t a priority”

This is related to “too busy.”

If you really see something as a priority, you can always find time.

As a colleague once said, “I may be busy, but when using the bathroom becomes a high priority, I somehow always find the time.” A few ways to elevate how much of a priority recognition is for managers is to first model recognition from the top. We worked with a client that had a 30-minute all-staff call with hundreds of employees. While they eventually got to operational conversations, the CEO always started with a recognition story. If the CEO can find time in a 30-minute all-hands, it sends the message to managers that there is time in a 60-minute smaller team meeting.

Our clients also help managers to see recognition as a priority when they allow managers to capture recognition for the topics they find more valuable. Maybe they have an eCard for Teamwork, but also have one that celebrates Picking up a Shift, as that is a behavior managers really appreciate. Or along with a general Customer Service eCard, have one for On-time Delivery.

Finally, sharing of metrics can be very influential. Leaders may not prioritize recognition, but if they see their department has a lower percentage participation than other groups, that may create urgency.

Learn more about how Reward Gateway | Edenred can help you create a culture of recognition within your own organization and make your corner of the world a better place to work.